Head to Head Comparison: Kaiser Aluminum (NASDAQ:KALU) & ESAB (NYSE:ESAB)

Kaiser Aluminum (NASDAQ:KALU) and ESAB (NYSE:ESAB) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Volatility & Risk

Kaiser Aluminum has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, ESAB has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Profitability

This table compares Kaiser Aluminum and ESAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kaiser Aluminum	2.05%	8.03%	2.41%
ESAB	9.98%	16.98%	7.69%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Kaiser Aluminum and ESAB, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kaiser Aluminum	0	2	1	0	2.33
ESAB	0	3	5	0	2.63

Kaiser Aluminum currently has a consensus price target of $69.00, indicating a potential downside of 16.78%. ESAB has a consensus price target of $138.89, indicating a potential upside of 4.40%. Given ESAB’s stronger consensus rating and higher possible upside, analysts clearly believe ESAB is more favorable than Kaiser Aluminum.

Institutional & Insider Ownership

99.3% of Kaiser Aluminum shares are owned by institutional investors. Comparatively, 91.1% of ESAB shares are owned by institutional investors. 1.4% of Kaiser Aluminum shares are owned by company insiders. Comparatively, 7.3% of ESAB shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Kaiser Aluminum and ESAB”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kaiser Aluminum	$3.02 billion	0.44	$46.80 million	$3.89	21.31
ESAB	$2.74 billion	2.94	$264.84 million	$4.44	29.96

ESAB has lower revenue, but higher earnings than Kaiser Aluminum. Kaiser Aluminum is trading at a lower price-to-earnings ratio than ESAB, indicating that it is currently the more affordable of the two stocks.

Dividends

Kaiser Aluminum pays an annual dividend of $3.08 per share and has a dividend yield of 3.7%. ESAB pays an annual dividend of $0.40 per share and has a dividend yield of 0.3%. Kaiser Aluminum pays out 79.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ESAB pays out 9.0% of its earnings in the form of a dividend. ESAB has raised its dividend for 3 consecutive years.

Summary

ESAB beats Kaiser Aluminum on 13 of the 17 factors compared between the two stocks.

About Kaiser Aluminum

Kaiser Aluminum Corporation, together with its subsidiaries, engages in manufacture and sale of semi-fabricated specialty aluminum mill products in the United States and internationally. It offers rolled, extruded, and drawn aluminum products used for aerospace and defense, aluminum beverage and food packaging, automotive and general engineering products. The company's automotive extrusions include extruded aluminum products for structural components, crash management systems, anti-lock braking systems, and drawn tubes for drive shafts, as well as offers fabrication services, including sawing and cutting to length. Its packaging products consist of bare and coated 3000- and 5000-series alloy aluminum coil used for beverage and food packaging industry. In addition, the company's general engineering products comprise alloy plate, sheet, rod, bar, tube, wire, and standard extrusion shapes used in various applications, including the production of military vehicles, ordnances, semiconductor manufacturing cells, electronic devices, after-market motor sport parts, tooling plates, parts for machinery and equipment, bolts, screws, nails, and rivets. Further, its rerolled, extruded, drawn, and cast billet aluminum products used for industrial end uses. The company sells its products directly to customers through sales personnel located in the United States, Canada, Western Europe, and China, as well as through independent sales agents in other regions of Asia, Latin America, and the Middle East. Kaiser Aluminum Corporation was founded in 1946 and is headquartered in Franklin, Tennessee.

About ESAB

ESAB Corporation engages in the formulation, development, manufacture, and supply of consumable products and equipment for use in cutting, joining, automated welding, and gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables comprising electrodes, nozzles, shields, and tips. The company's equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of software and digital solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, such as general industry, infrastructure, renewable energy, medical and life sciences, transportation, construction, and energy. It offers its products through independent distributors and direct salespeople. The company operates in North America, South America, Europe, the Middle East, India, Africa, and the Asia Pacific. ESAB Corporation was founded in 1904 and is headquartered in North Bethesda, Maryland.